Gates Paints Doomsday Scenario

Bill Gates painted a series of dire scenarios that would harm not only his company, but the entire "PC ecosystem," consumers, and even national interests if the states' remedy proposal wins court approval.

WASHINGTON, D.C.If a group of states seeking antitrust remedies against Microsoft Corp. gets its way, the Redmond, Wash., software maker could be forced to make code available to individuals forbidden by U.S. law from seeing it, license versions of Windows with serious known security flaws, and stop issuing emergency security patches, according to its chairman, Bill Gates.
In his second day on the witness stand at the U.S. District Court for the District of Columbia here, Gates painted a series of dire scenarios that would harm not only his company, but the entire "PC ecosystem," consumers and even national interests if the states remedy proposal wins court approval.

Microsofts main objections to the states proposal are that it is too vague to be implemented with certainty and it is so overarching as to eliminate any incentive Microsoft would have to continue innovating. Having testified a day earlier that the remedies would force him to remove Windows from the market and let go most of his employees, Gates told the court Tuesday of farther-reaching havoc the remedy could cause.

Section 3 of the states proposal, which requires the licensing of old versions of Windows for five years after the release of a new version, would force Microsoft to continue distributing a version of the operating system even if it had "a serious security flaw" that cant be fixed with a software patch, Gates testified.
Under Section 4, which mandates interoperability via APIs and other technical information disclosure and via access to Windows source code, Microsoft would be in a position to provide its source code to individuals barred by U.S. export restrictions from seeing it, he said.
Section 5, which bans any changes to Windows that interfere with or degrade the performance of other developers middleware, would prevent Microsoft from issuing security patches on a timely basis, Gates told the court.

Attorney for the states Steven Kuney challenged Gates as to whether he believed that Microsoft would be held in contempt for following bona fide security practices. Kuney tried to show that Microsoft is misinterpreting the remedy proposal and that many of the provisions involve practices Microsoft engages in already.
Gates conceded that some of the scenarios he painted were extreme examples but maintained that he would be obligated to take steps to be in full compliance with the remedy order regardless of who would enforce it or how.
Continuing the incessant wrangling over definitions that has marked the six weeks of the remedy hearing so far, Gates and Kuney discussed definitions of "interoperate." Because the definitions are vague, if the court were to approve Section 8, which prohibits retaliation, it could ban Microsoft from competing in any product category, according to Gates.
Highlighting several pieces of evidence from the liability trial that found Microsoft had violated antitrust laws, Kuney asked whether anything other than Section 8 existed to prevent Microsoft from engaging in the same kind of anti-competitive behavior in the future. Gates responded that the federal settlement proposal would prevent it.
The first section of the proposal, which requires Microsoft to market a version of Windows unbundled from its middleware products, would be impossible to comply with because any compliance method would either be technically infeasible or would violate other provisions in the proposal, he said.
In November, Microsoft agreed to settle the protracted antitrust case with the Department of Justice, but nine states and the District of Columbia refused to sign on.
Microsoft attorney Dan Webb objected frequently throughout Tuesdays cross-examination, repeatedly arguing that Kuney was attempting to re-litigate the liability trial in which Microsoft was found to have behaved in an anti-competitive manner.
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